World Plus victims get payments from trustee

Posted: Wednesday, December 11, 2002

FAIRBANKS (AP) -- The U.S. Bankruptcy Court has made a payment of $5.6 million to claimants in the Fairbanks-based World Plus investment scam.

About 500 people have received checks in the last few weeks, said bankruptcy trustee Larry Compton. Defrauded investors have now gotten back about $10.8 million, Compton told the Fairbanks Daily News-Miner.

To get part of the funds, Compton had to sue 618 people who made money in the defunct company operated by RaeJean Bonham. Compton also liquidated assets owned by Bonham and family members who were deemed liable.

Bonham made bulk purchases of frequent flier miles using investor money. She claimed the miles could be converted into discount airline tickets and sold for huge profits. But a federal judge called the World Plus investment scam a Ponzi scheme, that took money from new investors to pay huge returns to longer-term investors.

World Plus collapsed in 1995, spurring a flood of claims from investors throughout the country.

Bonham is serving an eight-year term in federal prison for charges including mail fraud, money laundering, perjury and submitting misleading securities filings. She was also fined $5.7 million.

About 1,200 people claimed they lost $60 million in the scam but only $29.5 million worth of claims made by about 500 individuals and businesses were scheduled to be repaid, Compton said. The recent payment is the second in a year, Compton said.

''We have (paid) 45 cents on the dollar,'' he said.

Most people who received a check and were contacted by the News-Miner did not want to publicly talk about the experience.

''Most people I know just want to get it behind them,'' said Jim Chumbley, who lost $22,500 and has collected $10,244.63.

Attorneys, special counsels, accountants and bankruptcy staff, including Compton, have received $6.5 million, Compton said. One of the largest payments went to Delta Air Lines.

The company received $544,132.92. For the most part payments ranged from several hundred dollars to tens of thousands.

In some cases, claimants were also those who were sued by Compton, but their claims were waived in lieu of payment, he said. Compton said that over the years since the discovery of Bonham's scheme he has heard of failed marriages and health problems of people involved in the scam.

''It's been a stressful and emotional case for everybody involved,'' Compton said.

Another smaller payment will be made in another two years, bringing the total payments to 50 cents to a dollar, Compton said.